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The Racial Tipping Point

A few years back, I got interested in taxicab tipping – and what influences how much people tip. So together with Fred Vars and Nasser Zakariya, I collected data on more than 1,000 cab rides in New Haven, CT and crunched the numbers. The study (published in The Yale Law Journal) found — after controlling for a host of other variables — two independent racial effects:

1. African-American cab drivers, on average, were tipped approximately one-third less than white cab drivers.

African-American passengers also seemed to participate in the racial discrimination against African-American drivers. While African-American passengers generally tipped less, on average they also tipped black drivers approximately one-third less than they tipped white drivers.

Passenger discrimination against African-American drivers was not subtle:

But as in all empirical studies, you have to ask whether the results are robust. Do black servers generally receive lower tips, and if so, why?

Our New Haven data did not have good information on the quality of driver service. We did a small amount of secret auditing of the drivers in our study to see if there were gross differences in the quality of service they provided. Our testers:

… subjectively rated the quality of service higher for black drivers than for white drivers (with an average rating of 4.5 out of 5 for black drivers versus an average of 3.3 for white drivers).

But we only succeeded in completing 10 audit rides with participating drivers — so at the end of the day, it was difficult for us to assess whether minorities received poorer tips because of providing poorer service.

…collected during three lunch shifts (11:00 a.m. to 4:00 p.m.) at a [large national chain] restaurant located in the southern United States.

Focusing on just blacks and whites, the study once again found that:

Consumers of both races discriminated against black service providers by tipping them less than white service providers.

A cross-tab of the raw data (generously emailed to me by Lynn) shows that white customers tipped black servers almost four percentage points less than white servers and that black customers tipped black servers half a percentage point less.

But unlike my taxicab data, Lynn’s survey asked customers for their perception of service quality, food quality, and atmosphere quality. He also was able to control for the size of the group, the bill size, and a host of other variables.

Lynn emailed me:

After controlling for these other variables … the server race effect is comparable across customer race.

But as a law professor what is most interesting about Lynn’s article is his suggestion that an employer might be held liable under Title VII of the Civil Rights Act for establishing a tipping policy that has a disparate impact against African-American employees.

Lynn has a pretty good argument that restaurant policies are a “but-for” cause of at least some of the racial disparity. If the restaurants posted “no tipping” signs or instituted “service compris” (instead of putting a place on the credit card receipt for customers to write in the tip), the size of the racial disparity would almost certainly decrease.

But the harder question is whether the racial disparate impact of tipping is legally justified by the legitimate interest of businesses to enhance customer service. Not all employer practices that produce racial disparities violate Title VII. But the employer bears the burden of proving that the policy of promoting/allowing tipping is “consistent with business necessity.”

Today we think of tipping as beyond the scope of legal regulation. But in researching my Yale article I was surprised to learn that in the early twentieth century, progressives in seven states passed anti-tipping statutes that, to varying degrees, outlawed tipping.

Critics referred to the practice as “un-American” and incompatible with democracy. Former Yale law professor (and U.S. president) William Howard Taft was the “patron saint of the anti-tip crusade,” and Ralph Waldo Emerson roundly condemned the practice:

I sometimes succumb and give the dollar, yet it is a wicked dollar which by and by I shall have the manhood to withhold.

Tipping was attacked as bribery and as “the training school of graft.” In “The Itching Palm,” a 1916 manifesto against the practice, William Rufus Scott said that tipping is a form of “flunkyism” defined as “a willingness to be servile for a consideration.”

Lynn’s small study of just 140 tips may illuminate another potentially unattractive aspect of gratuities — that they may facilitate a species of employment discrimination. There is a probably apocryphal story that the word “TIP” originated in British pubs, where signs with these three letters were posted on boxes as a reminder that gratuities were welcome. The letters were an acronym for the phrase “To Insure Promptness.” But the evidence from Lynn’s and my earlier studies are suggestive of a new acronym: “To Insure Prejudice.”

AMS

If the British pub legend is true, the word would have been TEP, not TIP. I am shocked at how many people in this country do not know the difference between "E"nsure and "I"nsure.

Beenthere

March 20, 2008 @ 7:44pm

Re: #11 "Doubt the restaurants themselves are better but I imagine the service is."

I've never noticed Parisian restaurants themselves as much as their food, which has always been uniformly wonderful (I'm easy). The service was mostly tactfully unintrusive, but sometimes surly in tourist-y areas, no surprise. Surly wait staff are encountered worldwide, of course, I'd bet as a result of dealing with people who think everyone should speak English and serve American food and who are quite honestly a bit surly themselves.

Colin

March 20, 2008 @ 8:09pm

"Colin from posting #11 apparently hasn't been to Europe much."

Yeah, except for spending 5 years living in 3 European countries...

There is a reason that European tourists are continually amazed at the level of service and friendliness they experience. You think the stereotype about snooty French waiters came out of thin air?

jim d

March 20, 2008 @ 7:39pm

I wonder if the disparity has root cause in our perceptions of class.

When I think about the unconscious motivations behind my own tipping practices, I find that I probably tip people higher when I perceive them to come from a higher social class.

Perhaps the racism here is that people automatically assume on average that blacks are from a lower social class than whites -- especially since it's hard to imagine that black customers are directly racist against black service porviders.

An interesting follow-up study to this would look at how tipping was affected by people's perception of the service providers social class, irrespective of race.

Scott Supak

March 21, 2008 @ 3:57am

Wonder what the breakdown by sex was? Women generally make 80% of what men make. I wonder if that holds true in tipping?

Angelo

March 22, 2008 @ 5:01am

How did the study control for quality of service? If I correctly assume that a tip is an added payment for quality service then in order to honestly compare white to black then the service quality must be controlled in the experiment, right?

Tim

March 20, 2008 @ 7:44pm

Besides racial discrimination, tipping for food service has created an environment where employers have no vested interest in promoting the well being of the server as an employee -- no health insurance, no vacation pay, no sick pay, no incentives whatsoever for the employee to see waitering as a profession.

As a former waiter, I found that the relationship between owners and servers was also servile -- I never experienced a workplace where employers felt so comfortable humiliating and exploiting employees.

While living & working in Europe, I worked as a waiter alongside professional servers. We received an hourly wage, vacation pay, & we worked fewer hours. Some of my co-workers raised families as waiters. The relationship between server & employer and between server and customer was very professional & the service was better than anything you could imagine in the United States.

Until tipping ends in the US as the primary form of compensation for servers, the quality of service will reflect the realities of the job -- servers seek to maximize their uncertain wages by fleecing those people who treat them with contempt. The legendary paranoia of restaurant owners who lose sleep b/c they feel their servers are stealing from them (and oh, let thy count the ways) are very well founded. Too bad for them that it's often a matter of survival and justice.

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Natalie

March 20, 2008 @ 7:45pm

They should be renamed teps. I doubt you can insure prejudice or prompt service.

anon

March 21, 2008 @ 4:31am

33, i also wondered about economics/class. the author covered it in his working paper (link in author's post). here's the excerpt:

...the tendency of non-minority passengers to tip more may be driven by socio-economic class differences. Possibly, rich people tip more, not white people. But our regression does not pick up this impact because we have again only very poor correlates with class (passenger dress, pickup and
drop-off locations).

Fortunately, a new study by Michael Lynn has good controls for both income and service in a national telephone survey he conducted eliciting information from approximately 900 consumers on their tipping behavior with regard to 9 different service providers - including taxi cab drivers.69 The respondents were asked not only their race, sex, and age, but also their income (in ten ordered categories) and education (in seven ordered categories). The survey additionally controlled for service quality in the way the tipping question was framed. For example with regard to cab tipping, respondents were asked:
"If you received good service from a cab or limousine driver would you tip a percent of the total cost of the service, tip them a flat amount or not give them a tip?"

Respondents who said they would leave a percentage or flat tip were then asked: "What
amount?" Lynn found that African-American respondents were 11% more likely than
white respondents to say that they would stiff a cab or limo driver (p

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Mike

March 20, 2008 @ 5:11pm

That'd be great if we can abuse the law to get rid of tipping. I hate it, I just want the price up front.

Waleed

March 20, 2008 @ 11:14pm

Maybe it is that when you are tipping, you assume that blacks are poorer and therefore will be satisfied with less (and unfortunately it is a justified assumption)!

I am also worried that if you get better service than me because you tip better, it might be some kind of bribe. I already payed the price listed in the menu!

Steve Atlas

March 20, 2008 @ 11:22pm

#64 makes a good point, that the size of the tip relates to the server's ability to sell expensive food and drinks.

This raises the problem that some inexpensive foods require a lot of effort on the part of the server, while expensive drinks, for instance, require only carrying them to the table without spilling. A $10 cocktail does not weigh much.

Tipping based on a percentage of the bill rather than the effort required is fundamentally unfair, yet it's the way most people calculate their tip.

Richard

March 20, 2008 @ 7:41pm

I am a white male above 60 years old who has lived in New York City for over 30 years.
1. I have never stiffed a cab driver.
2. I always tip the same regardless of race.
3. I have almost never seen an African American cab driver. They are mostly from other countries. Is the research based on Indians and Pakistanis and Haitians? Or is it biased as with most racial studies?
4. To what extent do the cabbies misrepresent their tips?

John

March 21, 2008 @ 1:21am

When I came to New York as a student, I was surprised at the fact that everyone had their hand out for a tip - the cabdrivers, the doormen, the waiters and waitresses, the bartenders, the maids, the porters, the bell boys, the concierges, the captains, the maitre'ds, almost anyone who dealt with the public, and of course the politicians.

I drove a taxi for a few years and I had my hand out too. I think tips averaged a little over 17% by my calculation. Most people tipped about 20%, but quite a few less. Park Avenue people generally tipped the most, a lot of old people only gave a quarter, and black people you took to Queens tipped better than people who took you to Spanish Harlem or the South Bronx. People who worked for tips did not want to give up the practice of tipping.

I also studied in Paris for a while and while servis compris was almost always the general practice, I used to frequent a large bar near Odeon Metro. I would tip the bartenders about 10 francs each time, which at that time was about $1.25 or less. I remember talking to someone who lived in Paris part of the year and in Venezuela the rest. He remarked, when he saw me leave a tip, "Why are you doing this? All you are doing is ruining it for the rest of us. Now the bartenders will look down upon us regulars!" I did get fringe benefits. The bartenders would give me free drinks (which is almost unheard of in Europe) and on weekends, when the line into the club would stretch for two or more blocks, I would go to the head of the line, wave to the bartender and be whisked right in. I got along quite well with waiters in Paris and the people were very friendly. Probably the exchange rate has a lot to do with the level of friendliness with the French. Right now I would think they are insufferable.

I did know a number of African-American and Carribean-American taxi drivers (this was in the mid-70's) and to my recollection, nobody complained about getting less or smaller tips because of the driver's race, although it's possible that people lied. There was a lot of griping about tipping in general. It also seemed true that black passengers tipped about half or less of what white Upper Eastsiders tipped. Chinese and Jewish also tended to tip less. That's why Park Avenue has always been a sea of yellow. Most taxi drivers tended to avoid picking up black passengers, because of poor tips, because you would usually be brought to a bad neightborhood, and there was a greater chance that someone would run out on the fare, or rob you. It seemed that black drivers tended to be more willing to pick up black passengers, while white drivers would *never* pick them up. It was also true that some passengers would not get into taxis with a black driver. That would certainly explain some of the discrepancy between tips.

As other people had mentioned, these types of studies should be better controlled, to really delve into the truth about tip discrepancy and racism. I could certainly believe it, because there is no doubt that racism both in small ways and in large, is still endemic in this country.

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Marc

March 20, 2008 @ 7:48pm

Professor Ayers,

Most restaurant employees pool tips at the end of the night, so that non-servers (bartenders, sous chefs, waterboys, etc.) can get "tipped out." It may be an official policy, or it may be a self-enforcing social norm, but either way I don't think your disparate impact cause of action has any legs.

Angel D.

March 20, 2008 @ 7:52pm

Let's flip this around. As a black person, I have experienced where a tip was automatically added to my party's tab, even if this was not the establishment's stated policy. Then, when I checked with the adjacent table (occupied by white acquaintances), no tip had been added - although their party was the same size. Ironically, the tip added to my tab has several times been less than I was planning to add voluntarily. Their loss! But, a source of great irritation to me as a conscientious black tipper.

Scott M

March 20, 2008 @ 7:55pm

AlexW?! What the heck are you talking about!? I have never tipped a drive-thru Tim's employee in my life. Infact, I just took a poll here in the office and I am sad report back that 0/5 tip at drive-thrus period, and would not even consider tipping at all unless it were a sit-down meal with table service. What part of Canada you from?

ScottM

T. Wright

March 20, 2008 @ 7:19pm

I don't know if this study, based exclusively on the variable "race," controlled what I would think would be another essential variable: economic status. Did these white and black tippers share similar earnings?

I hope this was not the case with this study; I get the impression that many of these analyses based on "racial" differences seem somewhat superficial, and skirt around the more serious reality of economic disparities.

jonathan

March 20, 2008 @ 7:22pm

My guess is that people tip African-Americans less because they want to save their money and they conclude from racial appearance they can get away with tipping less. That would be an interesting set of surveys: did the tippers somehow perceive a lower quality of service? if you set up situations where white servers intentionally give worse service, are their tips still higher? Lots of fun questions.

And where I live the majority of the cab drivers are either black African or black Caribbean, so it's ridiculous to generalize about that.

Professor, I was floored by your digression into the legal question. You're stretching to make a point, right? Trying to be provocative? You might start by discussing how it is that restaurants "choose" to "allow tipping" when that is the common custom today. This isn't a discriminatory hiring practice but a near universal method of compensating servers.

Question: did the rather sparse survey address the levels of tipping? In other words, if we assume restaurants set a 15% charge, were whites tipped at that level or above? How did the African-American tips relate to that?

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Eric Lenard

March 20, 2008 @ 7:23pm

I trained in France as a chef and worked for 20 years in restaurants in this country. I have received both excellent and atrocious service in both countries. The best have been from individuals who saw waiting tables as a skilled craft in which they took great pride and the worst was from people who resented me as a customer. Tipping is irrelevant to the quality of service--You can buy sycophancy, but not genuine hospitality.